27/11/2011 The Politics Show West Midlands


27/11/2011

Jon Sopel and Patrick Burns are here with the top political stories of the week.


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Transcript


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Here, mixed messages for our region's economy. We ask Bohr the

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Chancellor needs to do to sell us his Orton spending plans. And the

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Apology for the loss of subtitles for 2013 seconds

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Hello again from the Midlands. A little later, more on that "Day of

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Action", or is it "Inaction", if the public sector doesn't go to

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work on Wednesday? But one day before that comes the Chancellor's

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autumn statement. George Osborne will set out the options which he

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hopes can stimulate growth, without going soft on deficit reduction.

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Here with me to look ahead to both these main events are the

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Conservative MP for the Staffordshire Moorlands, Karen

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Bradley. She's a member of the Work and Pensions Select Committee. Ian

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Austin is the Labour MP for Dudley North and a member of the

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Opposition's work and pensions team. And Lorely Burt, is the Liberal

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Democrat MP for Solihull. She chairs her Parliamentary party. A

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warm welcome to you all bus-stop So what does the West Midlands want

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from the Chancellor this week? Our political reporter Susana Mendonca

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has been gauging the mood on the streets of Sandwell, Solihull, and

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The mulled wine is flowing, the chestnuts are roasting - yes,

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Christmas has come to Birmingham again, after what's been a rocky

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Unemployment's up in the West Midlands to 8.9%, and the economy's

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still struggling - prompting the business community here to write

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their very own wish list. But the man they've been writing to isn't

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The two key areas we have asked the Chancellor to look at our

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regulation and taxation. Proposed regulation between now and 2015

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could cost the West Midlands economy billions, that is money

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that isn't getting spent on hiring new people, it is a disincentive to

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investment. We also think he needs to look at levels of personal

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taxation and corporation tax. does he need a Plan B? Labour think

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so - they want the Chancellor to lower taxes and abandon spending

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cuts. All suggestions that make this mum from Bearwood's autumnal

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wish list - but then she is a Labour party member. I would like

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them to look at renewing the funding for local authorities, I

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think the cards have been parked too severe for local authorities,

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in particular, I am a social worker, I have had trouble finding a

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position because the local authorities are not employing,

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through no fault of their own, they have had to make such drastic cuts.

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It's unlikely, though, that the Chancellor will be handing out cash

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to local councils this week. After all, it's the tough austerity

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measures he's taken to tackle the budget deficit that George Osborne

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claims has made Britain a safe haven. But if you're a small or

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medium-sized business here in Birmingham that's seen its takings

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spiralling downwards, you might be hoping for a Plan A plus! And the

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Chancellor's thought to be mulling that over - with measures to boost

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growth on the horizon. That's certainly on the wish list at this

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family-run factory in Birmingham's Jewellery Quarter. It's been in

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business for more than 300 years and caters to a very niche market -

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making badges and medals for state occasions. But business has slowed.

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-- demand has dropped. What I would like to hear from the Chancellor is

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that he would be willing to relax the rules and regulations that cost

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a lot of money for companies as small as ours, these are rules and

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regulations that apply to health and safety, where they have

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experienced people coming in, saying you have to make all these

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changes to the business. So she wants an end to red tape, while

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larger firms are looking for something bigger. Solihull-based

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Miller Construction is building a new science block at Staffordshire

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University and has just finished Stoke-on-Trent's new sixth form

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college. Its chief executive says more state-funded infrastructure

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projects would be a way to keep West Midlands firms in business and

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create jobs across the region. Chancellor has only got so much

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money to spend, and by investing in public works, you get a benefit to

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the business community, to pound 84 for every �1 you spend in

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construction, but you also create new facilities at for the West

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Midlands. It's a long wish list. But with more gloomy economic

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predictions expected to come, they may not get all they've asked for.

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At least part of that wish list is about to come true, apparently,

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because the Chancellor is expected to respond positively to appeals

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like those of for some major government funded infrastructure

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project. Midlanders want lower taxes, surprise, surprise, but what

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is a surprise is that so do you, particularly a number of business

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taxes. Are you sure, given that the Prime Minister says you cannot add

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more debt to a debt crisis? That is right, we have to be clear about

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the fact that we are boring �150 million a year. -- borrowing. We

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have to put that into context. The only way we are going to grow our

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way out of this downturn is through the private sector, so anything

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that can be done to help the private sector to grow their way

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out of the downturn and boost the economy has to be a good thing.

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What about you, Ian? You have spoken about up grading the local

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authority, what would you advise him to do? I think there are tax

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cuts, we propose and national insurance cut or any company taking

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on new workers. We reckon attacks on bankers could raise hundreds of

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jobs and billions. The economy has flat lined, there is no growth at

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all, only Japan has grown more slowly than last of the major

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economies, and they have had an earthquake. Youth unemployment is

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at record levels, higher than at any point during the recession.

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What about the effect of the 50 p top rate of tax? An article says,

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there is growing evidence that this tax is damaging the economy and

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leaking taxes needed for public spending. I think it is

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extraordinary that Karen wants to cut the top rate of tax. What she

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is proposing and what many in the Tory party were deceived his tax

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cuts for the super rich, I don't know what world she lives in, but

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there are not one -- many of those in Dudley. And they are cutting tax

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credit for ordinary families. would go down very badly with

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people who were not the super rich. The point I was making was, how can

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you use taxes to boost the economy. The only bit of personal taxes that

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could stimulate economic growth is if we can get more of the wealthy

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entrepreneurs investing in the UK. My point is that if the 50 p tax

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rate is costing us tax revenue that we can use to pay for our teachers,

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nurses, police, we should look carefully at that. Where do you

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incline on this? Your party had to swallow its better instincts on VAT

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when the government came in, so do you incline with your coalition

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partner or a Labour? Well, if you put taxes up for the better off,

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then I don't see that is such a bad thing. We have got to have some

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fairness. And our input into what is happening now with regard to tax

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is that we have taken 880,000 people of the lowest paid out of

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tax altogether. These are people who spend their money, and that is

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contributing to the economy. have all been celebrating the 1000

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new jobs coming through Jaguar Land Rover, including in your

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constituency. The problem is that the private sector, although it is

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creating jobs, no way near enough to offset the results of loss of

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public sector jobs, and nowhere near enough for the Chancellor to

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close the gap for his economic strategy to have any success?

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don't agree with what Ian says, but manufacturing industry is actually

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growing in the West Midlands, and as a percentage of GDP it is

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growing. That is what we do well here in the West Midlands. We are

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putting money into investing in young people's jobs as well. One of

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the things that came through was that she wanted less regulation,

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which is one of the things your administration heaped on local

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industry and it is holding them back, have you learned from that?

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Where we can get deregulation we should do, but we need urgent

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action to create jobs across the economy. Instead of cutting taxes

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for the super rich, but repeat the bankers bonus tax, let's get people

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into work, create new homes, have a cut on National Insurance for firms

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creating jobs. I love this backbone is tax. It has been spent around

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nine or 10 times. But in fact, the money he is suggesting, when you

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take all the taxes of the people are receiving already, there is

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less than �2 billion to tax them in the first place. On you more in

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tune with the city then with the needs of people like ours? They are

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quite resentful of the bankers. do already have a financial

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transaction tax, stamp duty, we have a bank Leddy, raising more

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than the bank bonus tax, and it there is a 50 p tax rate that is

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paid on any bonus or any salary paid to a wealthy owner. That you

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want to get rid of. If it is not raising tax, that is what we need

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to look at. But I think it is important to remember that in the

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Staffordshire mordant, 80% of employees are employed in the

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private sector. I think you have to ask whose side these people are on,

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to be honest. They want to cut tax for the super rich, they want to

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cut child benefit for hard working families. Extraordinary. Not long

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to go now. The Chancellor will get to his feet in a couple of days'

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It's called a "Day of Action", but with hundreds of thousands of

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public sector workers going on strike right across the Midlands

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this coming Wednesday, it could equally be described as a day of

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inaction. The TUC say this protest against the Government's pensions

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proposals, will be the biggest "for a generation". Unison say it's

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their biggest campaign ever, involving over a hundred thousand

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people here in the Midlands alone, in local authorities and the health

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service as well as police support officers. Wednesday's main rally

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will be in Birmingham, with others principally in Stoke-on-Trent,

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Telford, Coventry and Worcester. I asked the man in charge of the

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union here how they could sustain their arguments that this pensions

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issue was their members' over- riding concern. If you look at the

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turn out in these ballads, between 27 and 31% only. No wonder people

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are questioning the legitimacy. think that is a bit of a red

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herring, because the proportion of how members who voted for strike

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action is the same as the proportion of people who voted for

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David Cameron, and nobody is saying that David Cameron... Democracy

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doesn't count for him. The majority of our members that voted in that

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ballot voted for industrial action, and that is why we are taking it.

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Of those who take part, their votes Count, those who don't take part,

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their votes are not counted. government says union should not be

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jumping the gun while these talks are in prices. We have had no

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choice. It is clear the government were prepared to make an illegal

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offer, but they have not made a meaningful offer. -- a meaningful

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offer. But the government say this isn't an unconditional offer, by

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going ahead with the strike action, you make the risk that the

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government will impose AA different deal altogether. That is simply

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bullying, from a government you're not prepared to listen to people,

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engaging in a lawful and democratic right to protest. What they should

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be doing is getting round the table, talking to us seriously and making

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a decent offer. But surely public sector pensions at the bone that

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are unaffordable, it is not unreasonable to ask your members to

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pay that bit more in, work a bit longer, just as people in the

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private sector are having to do. This issue off before ability, it

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is important to nail the myth. The pension scheme took in more than �2

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billion in contributions more than it paid out last year. The local

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government pension scheme took in more than �4 billion more than it

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paid out. What has happened is the government asking public sector

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workers to pay a 3% tax to pay off the deficit because none of these

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contribution increases are going to go into the pension scheme. The

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deficit was caused by a corrupt banking crisis, school meals

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workers, care workers, school crossing patrols workers could

:48:26.:48:29.

refuse collectors, none of those Dibble caused this deficit.

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there the mood among the public sector unions for a protracted,

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long, drawn-out campaign of industrial action, a winter of

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discontent? What we are focusing on delivering it is the best possible

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action on 30th November. Our hope as this will bring the government

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back to the negotiating table. The thing that will settle this dispute

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is an improved offer from the government. Your party doesn't

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really know whether to stick or twist on this one, do you? You have

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to distance yourself what will be an unpopular strike call but you

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don't want to separate yourself from your paymasters? Nobody wants

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to see the strike, but I think... So what is your advice to the

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unions? What I think should be happening is clear. Mums and dads

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are watching this programme, what they want to know is why it is

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David Cameron swanning around instead of sitting around a table

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with the unions, refusing to budge until this thing is negotiating and

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the strike is cancelled. They should be negotiating it non-stop,

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and there has been a failure from the government to do that.

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government don't stingy putting 110% in to getting a solution, do

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they? Only a few weeks ago they gave a compromise to support those

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closer to retirement and those at the lowest end of the earnings

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spectrum. I am not there at the negotiations, I am here.

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Negotiations are not happening. a lot of these ballots were taken

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before the compromise was on the table, so I would urge everybody

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who was considering striking, go on the government website, find out

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how you personally are affected. You may well find you are not worse

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off. That is absolutely true. People who are within 10 years of

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retirement, the lowest paid people, will pay nothing more. But the

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government and the unions have had a very constructive talks since the

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beginning of the year. They are not meeting this weekend. But they have

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been talking all year. But it is a tricky one when the government say

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what they are concerned about is to protect the people on the lower

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earnings, and that is a difficult one for the unions to argue against.

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You can negotiate about the benefits, the entitlement, all

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those sort of things, we negotiated settlements with the unions, but

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the issue here is this 3% tax. What have we heard today? We have had

:51:08.:51:18.
:51:18.:51:18.

carried wants to cut taxes for people on �150,000. But your dinner

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ladies and teachers are not going to be affected by this. The lowest

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paid will not be affected. Teachers, police support staff... I but did

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you take it on average, people pay on average between 1.5 and 3.5%

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into their pension, but the public sector is paying 19% in terms of

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their contribution, the taxpayer. Do you have any sympathy for the

:51:47.:51:51.

argument Ian is putting here, that these are responsible and diligent

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public servants, who discharge big and important responsibilities?

:51:58.:52:04.

agree, and I say... Let's put this in context, last year, the

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teachers' pension scheme paid out billions, that is not pavements to

:52:07.:52:12.

current teachers, it is payments to existing retired teachers. Of that

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7.5 billion, only 1.5 was contributions from existing

:52:16.:52:20.

teachers, so nearly �6 billion was paid by the taxpayer. That is about

:52:20.:52:26.

the same as we pay in international aid every year, a big number.

:52:26.:52:30.

Lib Dems have always had a strong identification with public sector

:52:30.:52:34.

workers. Are you uncomfortable that this coalition has put you at odds

:52:34.:52:38.

with what has traditionally been one of your big constituencies of

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support? I would be if I considered that what we are doing was unfair

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and unbalanced. I think it is a fair offer, given the fact that we

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are living so much longer, and be untenable situation we are in at

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the moment with the United money the taxpayer put into public sector

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pensions compared with those workers themselves. A long, drawn-

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out winter of discontent would be a PR disaster for Labour, wouldn't

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it? You have got to ask that of the government that has caused this.

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You have to ask about their values, they want to cut taxes for the

:53:14.:53:17.

super rich, they have abolished the tax on bankers bonus, they are

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hitting teachers, dinner ladies, nurses. The government have also

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been accused of rather celebrating the fact that they feel it is

:53:26.:53:30.

suggested that the unions have walked into a trap which rebounds

:53:30.:53:35.

very well for David Cameron. disagree with that. I wouldn't have

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started from here. If we were able to start from the beginning about

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public sector pensions, it wouldn't be how we have done today. The fact

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of the matter is, it is unsustainable. We are all living

:53:48.:53:53.

longer, that is fantastic, but that means the taxpayer, the fewer

:53:53.:53:55.

numbers of workers compared to those retired means there is not

:53:55.:54:01.

enough money in the part to keep paying pensions. So a little bit

:54:01.:54:05.

more of a contribution, and work a bit longer, so we can have one of

:54:05.:54:09.

the best pensions around when you retire. Can this be settled before

:54:09.:54:15.

the end of the year? I hope so. they get back to negotiations.

:54:15.:54:25.
:54:25.:54:26.

Absolutely. This is a critical, crucial period coming up. Thank you.

:54:26.:54:33.

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